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Gold slipped on Monday as investors booked profits after soft U.S. jobs data fuelled prices to a more than a one-month high on rising expectations that the Federal Reserve will begin cutting interest rates in September.
Spot gold fell 0.6% to $2,376.40 per ounce as of 1223 GMT, after rising to its highest level since May 22 on Friday. U.S. gold futures eased 0.5% to $2,384.80.
Data last week pointed to a slackening labour market that keeps the U.S. central bank on course to start cutting interest rates soon.
Markets are currently pricing in a 72% chance of the Fed cutting interest rates in September as well as another cut in December.
"We should not forget gold had a nice rally last Friday, so some profit taking and a stronger dollar post the French elections are weighing on gold today," UBS analyst Giovanni Staunovo said.
"Lower U.S. interest rates are likely to support more inflows into gold ETFs (exchange-traded funds), which likely has the room to push the yellow metal to $2,600/oz by the end of the year."
This week investors' focus will be on Fed Chair Jerome Powell's semi-annual Congressional testimony, comments from a series of Fed officials, and U.S. inflation data.
"If we get another downside surprise in inflation data, which we have seen pretty consistently in U.S. data, then that's going to be a tailwind for gold," said Kyle Rodda, a financial market analyst at Capital.com.
Elsewhere, top consumer China's central bank refrained from gold purchases to its reserves for a second consecutive month in June.
"Monthly data based on IMF reporting don't catch the full picture of central bank activity, so I would not be surprised if the final data from the World Gold Council indicates solid central bank activity in the second quarter of this year," UBS' Staunovo said.
Spot silver fell 0.4% to $31.09, platinum edged 1.6% lower to $1,010.10 and palladium dropped 21.3% to $1,012.94.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Additional reporting by Daksh Grover; Editing by Eileen Soreng and Janane Venkatraman)